Reflective and Reactive Systems

Introduction To Financial Accounting How the brain processes information to make decisions: reflective and reactive systems The human brain processes information in two ways to make decisions: the reflective system and the reactive (or reflexive) system. The reflective system is logical, analytical, deliberate, and methodical, while the reactive system is quick, impulsive, and intuitive, relying on feelings or habits to provide clues about what to do next. Neuropsychological research shows that the brain can only use one system at a time to process information [Darlow and Sloman] and that the two systems are controlled by different parts of the brain. The prefrontal cortex is more involved in the reflective system, and the basal ganglia and amygdala (the more primitive parts of the brain from an evolutionary perspective) are more involved in the reactive system. Reactive decision making We tend to assume that a logical, analytical path leads to better decisions, but whether that's true depends on the situation. A quick and intuitive way can save a life; When we suddenly feel intense fear, the fight-or-flight response leads to immediate action without systematically considering all possible options and their consequences. In addition, experienced managers can often make decisions very quickly because experience or knowledge has taught them what to do in a given situation. These leaders may not be able to explain the logic behind their decision, instead saying that they simply went with their "gut" or did what "felt" right. Because the teacher has encountered a similar situation before and figured out how to handle it, the brain immediately switches to a fast, intuitive decision-making system. Reflective decision making But the fast way is not always the best way to make decisions. Faced with new and complex situations, it is better to process existing information logically, analytically and methodically. As a leader, before making a decision, you must consider whether the situation requires a quick, "rush" reaction, but serious consideration. It is especially important to pay attention to emotions, because strong emotions can make it difficult to process information rationally. Successful leaders recognize the impact of emotions and know how to wait and intervene in a volatile situation after emotions have calmed down. Strong emotions - whether positive or negative - tend to pull us into quick, reactive decision making. Have you ever made a big "impulse" purchase that you were excited about but later regretted? It talks about the power of our emotions in our decision making. Big decisions should not usually be made impulsively, but rather thoughtfully. The role of emotions Just because we are aware of the role of emotions in decision making does not mean we should ignore them. Emotions can be powerful signals about what we should do, especially in situations with ethical implications. You can read more about how to make this decision later in this chapter in the Ethics in Practice box. Thinking about how we think about possible choices and why we feel the way we do can greatly improve our decision making. Effective decision making is thus based on both logic and emotion. Therefore, the concept of emotional intelligence has become popular as a characteristic of effective leaders. Emotional intelligence is the ability to recognize, understand, attend to and manage one's own and others' emotions. It involves self-awareness and self-regulation – essentially going back and forth between emotion and logic to analyze and understand your emotions and then use the necessary control to manage them as appropriate. Emotional intelligence also includes empathy - the ability to understand (and care about) other people's feelings. Finally, emotional intelligence includes social skills for managing the emotional aspects of relationships. Leaders who are aware of their emotions can consider what their emotions mean in a given situation and use that information to make decisions. Leaders who are aware of others' emotions can also use this knowledge to help groups function more effectively and participate in better group decision-making. Although emotional intelligence seems to come easily to some people, it can be developed and improved with practice.